October 21, 2019
At South Jersey Real Estate Academy, we teach students how to earn their New Jersey real estate license. But we also give them valuable tips on how to succeed as REALTORS® once they get their real estate license.
One of our instructors was giving such advice the other day when a student asked, “How is real estate selling right now?”
Never miss an opportunity to grab an opportunity!
“You’ll find that is one of the most frequently asked questions from people you meet, once they learn you are a real estate agent.” the instructor replied. “Now, you could say, ‘It’s good,’ or, ‘It’s great right now.’ But you have not learned why the person had an interest in asking that question. Was it just out of general interest? Or was it because they are planning to buy or sell real estate in the near future?” He went on to explain that by simply answering the question, the real estate agent would never know the person’s motivation for asking—and may have just missed a golden opportunity to make a sale.
Whenever somebody asks that question—the same question they ask stockbrokers when meeting them—the better response would be, “Why do you ask?” That can then lead to a conversation that will show the agent how they can determine the person’s needs and how they can be of assistance.
So, “How’s the market?”
Why do you ask? . . . just kidding!
Every few months, we write a blog that provides an overview of the current real estate market in the three South Jersey areas of Burlington, Camden and Gloucester counties. Brokers and agents are welcome to print this blog and pass it on to their clients and office associates. All we ask for is attribution to Garden State Real Estate Academy.
Relying on a single statistic, such as average sale price, can paint a less-than-complete picture. So by looking at our following compilation of statistics, you can see the answer to the question is that the South Jersey real estate market over the just-finished spring and summer selling season is excellent.
This report does not include commercial sales, land sales, or lease transactions. It does include all residential properties, from condominiums to townhouses, detached homes and farms.
The “30,000 feet view” should start with how many housing units have sold in the six months between March 1 and August 31, and how they compare to the previous year.
In Burlington County, 4,936 homes sold in 2019 vs. 5,188 units that sold in 2018. That is a drop of 4.85% in units sold.
Camden County also saw a reduction in units sold: 5,007 sold in the preceding six months in 2019 vs. 5,257 in 2018. So 4.8% fewer homes sold between March and August this year, compared to last year.
By contrast, Gloucester County saw an increase in units sold year-over-year with 3,294 sold in 2018 vs. 3,186 in 2018—a small 3.4% increase, but an increase nevertheless!
How can my comment about an “excellent” selling season be justified when two of the three counties show fewer homes having sold? Because that statistic alone does not tell the whole story. One reason fewer homes have sold is that there are fewer homes on the market, as we shall see next.
Here is we can see the most dramatic statistic in our six-month review of the South Jersey housing market.
At the end of August, Burlington County had 3,160 homes for sale. That sounds like a lot, but one year earlier, there were 4,387 homes on the market. So housing inventory has dropped 28%.
Camden County has seen an even more dramatic fall in inventory: 3,302 homes were for sale at the end of August 2019 vs. 4,791 in August 2018. This means there were 31% fewer homes for sale this August versus last August.
Finally, Gloucester County’s housing inventory dropped even further, with 2,140 homes available in August 2019 vs 3,155 in 2018—a 32% decline in available properties.
We can attribute the falling inventory to several causes. The most important factor is that much of the distressed housing inventory that has plagued the market and kept prices down since the crash of 2008 has now been sold. The days when “flippers” could swoop in and buy short sale or foreclosure properties for a fraction of their true value are long gone!
What about home prices?
One of the most important considerations in pricing listings (or any other commodity) is the Law of Supply and Demand. The fewer of an item that are available, the more the seller can increase the price for buyers who need that commodity. And so we have finally seen increases across the board in home prices.
For the same six-month spring and summer market, Burlington County home prices have increased 10.3% year-on-year from an average median sale price of $198,375 to $218,875. The average sale was made at 97.42% of its original listing price.
Down the road in Camden County, median home prices year-on-year went up 9% from $163,075 to $177,833. Those properties also sold for 97.4% of original list price.
In Gloucester County, median home prices averaged $184,658 in 2019—up 6% from $174,070 in 2018. They closed at 97.18% of their original listing price.
What does this all mean?
It means this is a great time to buy a home, and an even greater time to be a real estate professional. Inventory is low, prices are increasing and that means two things: sellers who may have been hesitating to sell their home while prices were driven down by so many short sales and foreclosures now might be attracted to list their properties. And buyers, when word gets out that home prices are increasing, will want to take advantage of the low interest rates to buy a new home while they can afford it.
At Garden State Real Estate Academy, we teach students how to learn the complex topics they need to know to pass the state licensing exam. Our small class sizes and great instructors have helped our students attain an 85% pass rate on the first attempt at the state exam, compared to 62-63% from all schools combined. But we go further. Our instructors are experienced in the real world of real estate. So we also pass on tips from decades of expertise that will help them “hit the ground running” after they earn their real estate license. Come join us at Garden State Real Estate Academy—now offering classes in Cherry Hill AND Galloway Township!—and let New Jersey’s top-ranked real estate school help you get your license soon!
David C. Forward is a licensed real estate broker and instructor and was first licensed as a Realtor® 31 years ago. During his career, David and his business partner sold more than 450 homes in South Jersey. He is now School Director of Garden Real Estate Academy, has won numerous awards for real estate sales, is a much-requested public speaker who has addressed audiences on six continents and is the author of 14 books. You can reach David at David@GSREacademy.com